COMMERCIAL INVOICE

Document required by customs to determine true value of the imported goods, for assessment of
duties and taxes. A commercial invoice (in addition to other information), must identify the buyer
and seller, and clearly indicate the

1. Date and terms of sale

2. Quantity, weight and volume of the shipment
3. Type of packaging
4. Complete description of goods
5. Unit value and total value
6. Insurance, shipping and other charges.

SHIPPING INVOICE

A shipping invoice is a general accounting of items sent from one individual or company to another.
Standard information includes the name and location of the person or organization sending the
goods as well as the name and location of the receiving party. An itemized list of the goods, including
the cost of each item, the number of each item and the total cash of the item is also included. The
total charge to the recipient, including applicable tax and discount, is also included.

DIFFERENCES BETWEEN COMMERCIAL INVOICE AND SHIPPING INVOICE

As the commercial invoices are used in international shipping, summary information is considerably
more detailed than that of a standard shipping invoice. Along with the basic shipper and receiver
information, a commercial invoice includes specifics regarding the date and term of sale; the
quantity, weight or volume of the items in shipment; a description of the goods; a description of the
packaging; per-unit value as well as total value; and insurance cost and shipping charges.

Shipping invoices are fairly simple and straightforward, they can be created with no requisite
specialization. Commercial invoice, on the other hand, are inherently more complex because of the
level of detail required.

LETTER OF CREDIT

L/C is a written commitment to pay, by a buyer’s or importer’s bank (called the issuing bank) to the
seller’s or exporter’s bank (called the accepting bank, negotiating bank, or paying bank). A letter of
credit guarantees payment of a specified sum in a specified currency, provided the seller meets
precisely- defined conditions and submits the prescribed documents within a fixed time frame.
These documents almost always include a clean bill of lading or air waybill, commercial invoice, and
certificate of origin. To establish a letter of credit in favour or the seller or exporter (called the
beneficiary) the buyer (called the applicant or account party) either pays the specified sum (plus
service charges) up front to the issuing bank, or negotiates credit.

Letters of credit are formal trade instruments and are used usually where the seller is unwilling to
extend credit to the buyer. In effect, a letter of credit substitutes the creditworthiness of the buyer.
Thus, the international banking system acts as an intermediary between far flung exporters and
importers.
However, the banking system does not take on any responsibility for the quality of goods,
genuineness of documents, or any other provision in the contract of sale, since the unambiguity of
the terminology used in writing a letter of credit is of vital importance, the International Chamber of
Commerce (ICC) has suggested specific terms (called Incoterms) that are now almost universally
accepted and used. Unlike a bill of exchange, a letter of credit is a non-negotiable instrument but
maybe transferable with the consent of the applicant. Although letter of credit comes in numerous
types, the two most basic ones are:

1. Revocable-credit letter of credit

2. Irrevocable-credit letter of credit
 Confirmed
 Non-confirmed

BILLS OF LADING

 It is a document signed by a carrier (a transporter of good) or the carrier’s representative

and issued to a consigner (the shipper of goods) that evidences the receipt of goods for
shipment to a specified designation and person. It is a document issued by a carrier, or its
agent, to the shipper as a contract of carriage of goods. It is also a receipt for cargo